The state of technological sophistication and the need for new specialised tertiary degrees in food services

Hospitality management graduates have limited insights into latest operational/technological concepts such as Industrial Cuisine, Molecular Gastronomy and Personalised Nutrition. In fact, ‘hard’ or equipment-based technologies support the two major strategic options, cost leadership and differentiation. At present, suppliers and governments, but not operators, drive research and development in the field. In the education sector, new specialised curricula incorporating pathways stemming from natural science are needed to equip future graduates with ‘cutting edge’ skills for innovation at product, process and system levels. The research-teaching cycle can be strengthened by sharing degrees with departments of science and engineering across tertiary institutions.     

Modelling the Crop Variety Demand of Semi‐Subsistence Households: Bananas in Uganda

We propose an approach to model the derived demand for crop varieties among semi‐subsistence farmers in a developing economy, and apply it to smallholder banana producers in Uganda. We model variety planting decisions as being composed of an extensive margin decision to grow a subset of locally available varieties (variety choice); and an intensive margin decision about the scale or extent of variety cultivation per farm (variety demand). We estimate variety demand equations using a more complete representation of the choice set upon which observed planting decisions are made. Computed elasticities of variety demand with respect to variety attributes indicate that the relative importance of consumption and production attributes varies by location and proximity to markets, from which we draw implications for the social and economic impact of crop improvement. The approach that we propose has broad appeal for analysing adoption decisions for modern or traditional varieties of both major and minor crops in developing countries.     

Networking among Russian farmers and their prospects for success

In most post-socialist economies, private farming has re-emerged after regime change, although even today this sector most often accounts for only a minor proportion of national production. Russian private farmers are reported to dislike formal cooperatives, so this study investigated whether their informal collaborative arrangements may affect their business results. A survey involving personal interviews with 158 randomly chosen private farmers in the Kurgan Region examined whether collaborating farmers are economically more successful and consider their financial situation to be better than that of neighbouring farmers. Ordinary least square and ordered probit regression analysis indicated that farmers with stronger networks are more successful in terms of farm wealth, and also relative to the financial situation of their immediate neighbours. This suggests that success among private farmers in a post-socialist setting is related to their networks.     

EFFICIENT PRICING OF BARRIER OPTIONS AND CREDIT DEFAULT SWAPS IN LÉVY MODELS WITH STOCHASTIC INTEREST RATE

Recently, advantages of conformal deformations of the contours of integration in pricing formulas for European options have been demonstrated in the context of wide classes of Lévy models, the Heston model, and other affine models. Similar deformations were used in one‐factor Lévy models to price options with barrier and lookback features and credit default swaps (CDSs). In the present paper, we generalize this approach to models, where the dynamics of the assets is modeled as , where X is a Lévy process, and the interest rate is stochastic. Assuming that X and r are independent, and , the infinitesimal generator of the pricing semigroup in the model for the short rate, satisfies weak regularity conditions, which hold for popular models of the short rate, we develop a variation of the pricing procedure for Lévy models which is almost as fast as in the case of the constant interest rate. Numerical examples show that about 0.15 second suffices to calculate prices of 8 options of same maturity in a two‐factor model with the error tolerance and less; in a three‐factor model, accuracy of order 0.001–0.005 is achieved in about 0.2 second. Similar results are obtained for quanto CDS, where an additional stochastic factor is the exchange rate. We suggest a class of Lévy models with the stochastic interest rate driven by 1–3 factors, which allows for fast calculations. This class can satisfy the current regulatory requirements for banks mandating sufficiently sophisticated credit risk models.